97 Million Acres of Corn May be a Stretch; Here’s Why

AgDay 04/01/20 Acreage LookLive
As COVID-19 acted as an anchor on the markets, and the ethanol crisis continues to unfold, some analysts think 97 million acres of corn is a stretch in 2020. ( Farm Journal )

 As planting gets underway in some areas, it’s already off to a painful start.

“We ourselves have nothing in the ground,” says Alex Koehn, a farmer in Paris, Texas. “In visiting with other farmers, I would say 15% to 20% [of the crop] is in the ground in this area. That is probably one of the latest on record.”

The crop isn’t just late because of too much rain. The saturated soils mean the small portion of the crop already planted is also struggling to pop out of the ground.

 “It's looking like nearly 100% of what is in the ground is going to be replanted,” he adds.

With a crop insurance deadline approaching in just 15 days, Koehn and other area farmers are trying to accept the fact a large number of acres will go fallow in their area this year.

“We're looking at probably about 50%, and this will be the first time ever,” Koehn says. “As long as I've been farming with dad now, he has never to my knowledge pulled any large amount of acres to prevent plant, other than maybe a field or two. So, this is looking like probably one of the worst years of history.”

Koehn says their farming operation does everything possible to get a crop planted, and that will be the case again in 2020.

“About half of our acres are irrigated, and those acres we're willing to take the risk and even run after the insurance deadline if we need to,” Koehn says. “Especially with the low percentage of acres planted in this area, we expect a positive basis come fall. So, we want at least to get those in the ground. The other 50% will be dryland and that's we're looking at pulling prevent plant on.”

Koehn may be in what’s considered a “fringe” growing area, but as corn prices continue to fall, it’s looking even less appealing to plant corn this year.

USDA’s March Prospective Plantings report released March 31 revealed farmers intend to plant nearly 97 million acres of corn this year. Those survey results were based on producers’ plans as of the first two weeks of March.

Chip Nelliger of Blue Reef Agri-Marketing says a lot has changed since during March. As COVID-19 acted as an anchor on the markets, and the ethanol crisis continues to unfold, he thinks 97 million acres of corn is a stretch in 2020. In fact, he thinks it will be the highest acreage number for corn USDA prints this year.

“That’s due to several reasons,” Nellinger says. “No. 1, prices have dropped now dramatically. So, price does matter, and probably of anything out there, corn is the furthest away from breakeven levels right now. It's also really wet in the South, so you could curtail some acreage back from that. And it's still too early to tell in the far northern plains - the Dakotas and Minnesota - whether you're going to achieve those planted acres, as well.”

Whether farmers plant 97 million acres of corn or not, an updated story won’t be revealed until the Acreage report at the end of June. However, Nellinger thinks the market is also casting doubt on such a high number of corn acres this year.

“On Tuesday, the market pushed lower immediately after that big corn number, but we've since stabilized, so the market I think is telling us it doesn't believe we're going to see 97 million acres of corn.”

If the U.S. doesn’t see a surge in corn acres, then where could those acres go? Nellinger thinks it will be a mix of soybeans, sorghum and specialty crops.

“I think you're going to see more beans,” Nellinger says. “I think in the North, you're going to see spring wheat in the mix. A lot of vegetable crops like green beans, peas, sugar beets. There are lot of crops in the northern plains. In the South, I've heard anecdotally that you're picking up peanut acres, you're picking up some rice acres.”

Nellinger says while the core of the Midwest probably won’t see a huge shift in acreage, he is hearing from more farmers who are uncertain if they will plant as many corn acres as originally planned.

“It's a case-by-case scenario, but I do think prices are going to dictate fewer corn acres than what you saw in the report today,” Nellinger says.

From planting to prices, 2020 is proving to be another challenging year.

  “2019 was bad, but this is making 2019 look like a walk in the park,” says Koehn.

If the window opens up to plant, farmers in 2019 proved a large number of acres can get seeded in just a matter of days. But farmers in Texas are proving, once again, Mother Nature has the final say on what gets planted – and what doesn’t- in any given year.

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Analysts: Ethanol Declines Make USDA Corn Projections Doubtful

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